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WTFC vs. UMBF: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Midwest sector have probably already heard of Wintrust Financial (WTFC - Free Report) and UMB Financial (UMBF - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Wintrust Financial has a Zacks Rank of #2 (Buy), while UMB Financial has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that WTFC likely has seen a stronger improvement to its earnings outlook than UMBF has recently. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
WTFC currently has a forward P/E ratio of 11.88, while UMBF has a forward P/E of 15.78. We also note that WTFC has a PEG ratio of 0.70. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UMBF currently has a PEG ratio of 3.50.
Another notable valuation metric for WTFC is its P/B ratio of 0.69. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, UMBF has a P/B of 0.89.
These are just a few of the metrics contributing to WTFC's Value grade of A and UMBF's Value grade of C.
WTFC stands above UMBF thanks to its solid earnings outlook, and based on these valuation figures, we also feel that WTFC is the superior value option right now.